11/30/2017 13:58 EST | Updated 11/30/2017 14:00 EST

CREA wants parents to assist children with home purchase with their RRSPs

OTTAWA — The Canadian Real Estate Association is pushing for federal changes that would allow parents to assist their children with the purchase of a home by tapping into their RRSPs.

CREA says in its 2018 pre-budget submission the House of Commons Standing Committee on Finance that extending the Home Buyers' Plan to allow for "intergenerational RRSP loans" would ease the financial burden that many young Canadians face when trying to purchase a home for the first time.

The association reported earlier this month that the national average price for a home sold in October was $505,937, up five per cent from a year ago. Excluding the hot housing markets in Greater Vancouver and Greater Toronto, the average price was just over $383,000.

It says that given the recent and rapid increase in home prices, many parents are already giving their children a gift of money as a downpayment for a home.

CREA says creating a formalized mechanism that allows parents to transfer their RRSP savings — up to the maximum HBP withdrawal amount of up to $25,000 per year — could help increase their child's available downpayment amount.  

It says both parents would be eligible to withdraw from their RRSPs, and loan funds to whom they had previously claimed as ‘dependents’ on their Income Tax Return.

CREA also wants to make homeownership more affordable by increasing the HBP withdrawal amount by $10,000.